Cluelessness on the part of the NYTimes
As Housing Goes, So Goes the Economy - NYTimes.com:
"Since the problems in housing are not self-curing, a government fix is in order. But the Obama administration’s main antiforeclosure effort has fallen far short of its goal to modify three million to four million troubled loans."
Housing is not productive, and has been so abused (used as an ATM for consumerism ) that we have a totally mis-oriented economy.
Destruction of savings, sprawl, and, of course, the pollution of the financial markets (with mis-use of derivatives)
Try this
Angst in the United States: What's wrong with America's economy? | The Economist
Plenty of blame to share, and time for politicians to come back to the middle
"Meanwhile, the biggest dangers lie in an area that politicians barely mention: the labour market. The recent decline in the jobless rate has been misleading, the result of a surprisingly small growth in the workforce (as discouraged workers drop out) as much as fast job creation. A stubborn 46% of America’s jobless, some 6m people, have been out of work for more than six months. The weakness of the recovery is mostly to blame, but there are signs that America may be developing a distinctly European disease: structural unemployment."
And we have
America's jobless men: Decline of the working man | The Economist:
"Why ever fewer low-skilled American men have jobs" - because policies help discourage low skilled workers.
"When work doesn’t pay
Policies have created perverse incentives for both groups. The older dislocateds often try hard to be declared officially disabled, even though it can take up to three years and cost several thousand dollars in legal fees, not least because this brings access to Medicare, a government health-insurance scheme. (Many low-wage jobs do not come with health insurance.) But this is also a one-way street to permanent detachment from the workforce. In recent years the government has tried to encourage disability recipients to return to work, for instance by promising that they can stay on Medicare for several years. This scheme, says Larry Katz of Harvard University, has been “utterly ineffective”.
For the younger group, one cause of discouragement is the earned-income tax credit (EITC), America’s main anti-poverty tool, which tops up poorer people’s pay and thus rewards work. It is skewed towards those with children. The maximum EITC top-up for a childless person is less than $500 a year. Families with one child get more than six times as much; those with two, more than ten times. Single, low-skilled men therefore face a lower effective real wage than low-skilled women with children and have less incentive to work.
Child-support rules also discourage poorly skilled men from working. Many are absent fathers, whose child-support payments are often deducted directly from their pay. Some states levy an extra charge to cover welfare payments to the mother. In a dozen states men continue to accrue child-support obligations if they are in prison, from which they can emerge owing thousands of dollars. Deductions can amount to 65% or more of their wages."
Also Kansas City Fed's Hoenig Sees Need to Lift Rates - WSJ.com :
Mr. Hoenig said more thrift among American consumers would be a good thing in the long term.
"We've created a generation of instant gratification because our savings rate, which was running at eight percent for years and years...fell to two percent or less," he said. "If you look at countries, those that stay great...they have reasonable savings rate [s]."
Treating your house like an ATM is not savings - it's consuming ...
